Overview and Importance of Distribution of Income

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Distribution of income in any given economy is known as how the income is allocated between households. This phenomenon is not to be confused with distribution of wealth which looks at the ownership of assets in an economy, as opposed to the income. The topic of income distribution is a very hot subject due to the perceived income inequality in the United States. It is talked about on a daily basis on almost every political talk show, news program, business news show, and the list goes on. The reason for it being such a controversial subject is because the income distribution in an economy affects every single person in that economy. There are many methods of gathering information, compiling it and analyzing the data. There are also many ways to manipulate or affect the distribution of income, whether it is done naturally or done deliberately in order to achieve a certain outcome. The analysis also provides information on how certain actions affect income distribution and may give clues as to how to prevent a large gap in income inequality, or correct the gap. Sometimes the data can give clues as to whether the government should tighten the regulations in certain industries or loosen up on them, and much like every other subject the government gets involved with, there are many people who support government intervention, but there are also many people who oppose it. Each side makes a compelling case in support of their views. A general study of income distribution will help further understand how decisions are made in an economy as well as helping to prevent income inequality or fix the gap between the rich and the poor. Distribution of income is normally compiled and divided up in five groups known as quintiles. The... ... middle of paper ... ...scientificamerican.com/article/ask-gini/ Morici, P. (2014, January 20). What Obama doesn't get about income inequality. Fox News. Retrieved May 12, 2014, from http://www.foxnews.com/opinion/2014/01/20/what-obama-doesnt-get-about-income-inequality/ Ness, D. (2013, September 18). A Bitter Pill: New Census Data Show Gender-Based Wage Gap Is Largely Unchanged Since 2002. The Huffington Post. Retrieved May 12, 2014, from http://www.huffingtonpost.com/debra-l-ness/gender-based-wage-gap_b_3941580.html O'neill, J. (2013, April 9). Race and gender wage gaps: Discrimination still to blame?. AEIdeas. Retrieved May 12, 2014, from http://www.aei-ideas.org/2013/04/race-and-gender-wage-gaps-discrimination-still-to-blame/ Saving in 2005 Worst Since 1933. (2006, January 30). The New York Times. Retrieved May 10, 2014, from http://www.nytimes.com/2006/01/31/business/31econ.html?fta=y

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